Value stocks typically trade at discounts to the broader market, offering patient investors the opportunity to buy businesses when they’re out of favor. The key risk, however, is that these stocks are usually cheap for a reason – five cents for a piece of fruit may seem like a great deal until you find out it’s rotten.
Identifying genuine bargains from value traps is something many investors struggle with, which is why we started StockStory - to help you find the best companies. That said, here are three value stocks with little support and some other investments you should consider instead.
Domo (DOMO)
Forward P/S Ratio: 1.7x
Named for the Japanese word meaning "thank you very much," Domo (NASDAQ: DOMO) provides a cloud-based business intelligence platform that connects people with real-time data and insights across organizations.
Why Is DOMO Risky?
- Offerings couldn’t generate interest over the last year as its billings have averaged 1.1% declines
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
At $12.56 per share, Domo trades at 1.7x forward price-to-sales. If you’re considering DOMO for your portfolio, see our FREE research report to learn more.
Teladoc (TDOC)
Forward EV/EBITDA Ratio: 4.5x
Founded to help people in rural areas get online medical consultations, Teladoc Health (NYSE: TDOC) is a telemedicine platform that facilitates remote doctor’s visits.
Why Are We Hesitant About TDOC?
- Annual revenue growth of 2.9% over the last three years was below our standards for the consumer internet sector
- Preference for prioritizing user growth over monetization has led to 7.9% annual drops in its average revenue per user
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
Teladoc’s stock price of $7.11 implies a valuation ratio of 4.5x forward EV/EBITDA. To fully understand why you should be careful with TDOC, check out our full research report (it’s free for active Edge members).
Norwegian Cruise Line (NCLH)
Forward P/E Ratio: 7.2x
With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE: NCLH) is a premier global cruise company.
Why Are We Wary of NCLH?
- Demand for its offerings was relatively low as its number of passenger cruise days has underwhelmed
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Norwegian Cruise Line is trading at $18.64 per share, or 7.2x forward P/E. Read our free research report to see why you should think twice about including NCLH in your portfolio.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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